Who is responsible for the cost of the insurance policies for a Golden Corral franchise?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
s not to transmit or cause any other party to transmit advertisements or solicitations
by telephone, email, text message, instant message, social networking website, VoIP, streaming media, or any other electronic medium without first obtaining Franchisor's written consent as to (a) the content of the advertisements or solicitations and (b) the type of media intended to be used.
12. INSURANCE
- 12.1 Franchisee's Insurance: Franchisee shall procure, prior to the commencement of any operations under this Agreement, and maintain in full force and effect during the term of this Agreement, at Franchisee's expense, an insurance policy or policies protecting Franchisee, Franchisor, and Golden Corral Corporation and their officers, directors, shareholders, partners, and employees, against demand or claim with respect to any loss, liability, personal and bodily injury, death, property damage, or expense whatsoever, arising or occurring upon or in connection with the franchised business. Such policy or policies shall be written by an insurance company satisfactory to Franchisor in accordance with standards and specifications set forth in the Manuals or otherwise in writing, and shall include, at a minimum, (except as additional coverages and higher policy limits may reasonably be specified by Franchisor from time to time in the Manuals or otherwise in writing) the following:
- 12.1.1 Comprehensive general liability insurance, including broad form comprehensive general liability endorsement, product liability and independent contractors coverage and comprehensive automobile liability coverage, for owned, hired and non-owned vehicles used by the franchised business, for bodily injury, personal injury, and property damage with limits of not less than One Million Dollars ($1,000,000) combined single limit (Two Million Dollars ($2,000,000) aggregate for multi-unit franchisees) and naming Franchisor and Golden Corral Corporation as additional insureds in each such policy or policies;
- 12.1.2 Workers' compensation and employer's liability insurance with limits of not less than Five Hundred Thousand Dollars ($500,000) as well as such other insurance as may be required by statute or rule of the state or locality in which the franchised business is located and operated;
- 12.1.3 Dram shop or liquor liability insurance coverage with a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence during all times that Franchisee serves an alcoholic beverage at the Premises;
- 12.1.4 All risk physical damage insurance, to include but not limited to flood and earthquake coverage which is required if the Restaurant is in a flood or earthquake zone, including replacement cost endorsement with primary and excess limits of not less than one hundred percent (100%) of the full replacement value of the Restaurant, its equipment, furniture, signs, and fixtures;
- 12.1.5 Business interruption insurance, including coverage for payments to Franchisor for loss of royalties and payments to the advertising Funds as a
Source: Item 22 — CONTRACTS (FDD pages 84–85)
What This Means (2025 FDD)
According to Golden Corral's 2025 Franchise Disclosure Document, the franchisee is responsible for procuring and maintaining insurance policies at their own expense. These policies must protect the franchisee, Golden Corral, and their respective personnel against any claims related to loss, liability, injury, death, property damage, or expenses arising from the franchised business.
The insurance policies must be written by a company acceptable to Golden Corral and adhere to the standards specified in their manuals. The required coverage includes comprehensive general liability insurance with a minimum of $1,000,000 (or $2,000,000 for multi-unit franchisees), workers' compensation insurance with limits of $500,000, and dram shop or liquor liability insurance of $2,000,000 per occurrence if alcohol is served. Additionally, all-risk physical damage insurance and business interruption insurance are required, along with commercial umbrella insurance with $5,000,000 limits.
The franchisee must provide evidence of satisfactory insurance and proof of payment to Golden Corral. This includes submitting certificates of insurance before construction, reimaging, training, and the restaurant's opening. The franchisee is also responsible for ensuring that these policies provide primary insurance coverage to Golden Corral and that Golden Corral's own insurance policies are considered excess coverage.
This requirement means a significant ongoing expense for Golden Corral franchisees. It is common practice in franchising for franchisees to bear the cost of insurance, but the specific coverage types and amounts can vary. Franchisees should factor these insurance costs into their financial projections and business planning.